Market Review for March 18

The week began with gaps and promises us a lot of interesting things to come. Suffered most EUR, and its impact on the dynamics of the weakness of other currencies: the demand for the yen as a safe haven currency (at the expense of USD), as well as interest fell to risky commodity currencies. It seems the single currency again falls to the level of risk, despite the fact that the last time on the EUR/USD, we observed quite adequate response. As a result, EUR/USD ended the day in the 1.2940 and GBP/USD — in the area of ​​1.5090.

So, morning EUR/USD opened the gap down to around 1.2986, and then continued to fall to a minimum 1.2881 and then fluctuated from side to side for the remainder of the day. All this turmoil was caused by an unexpected ultimatum from the EU: Cyprus will be allocated 10 billion of the 17 billion needed to eliminate the state’s economy from the economic crisis. The remaining 7 billion Cyprus offered to find yourself. This was the reason for the introduction of a single tax on deposits. Parliament has not yet approved the decision, but still ahead. Pair closed near 1.2940.

GBP/USD almost no reaction to what happened in Cyprus, as the main reaction is manifested in the cross-country race with EUR. Against the background of an empty calendar demand for European alternative to unreliable euro rose. EUR/GBP opened day gap down to 0.8533 during the day and was able to recover only 40 points from lost 113 points in the morning.

USD/JPY has also suffered the loss of all on the same topic. As it turned out, investors felt yen safer than USD, so the discovery was 90 points lower — at the level of 94.33 to advance in the same hour minimum 94.06. But did not get on, and the pair retreated to the area of ​​95.20 at the close, virtually neutralizing all losses.

Forecast for Tuesday, March 19, 2013

No matter how small, Cyprus, and no matter how bad was his reputation, but the precedent confiscate money from investors — this is not something that investors can easily be forgotten in a couple of days. EUR/USD is traded with caution in the near future, the chaotic flash sales are not excluded. 1.29 level will serve as support for now, but great disappointment on the part of economic releases or political action can provoke a breakdown.

Now all the market’s attention will be focused on solving the Cyprus Parliament: too many contradictions and too great opposition, so officials will try to come up with some way (already worked out lower interest rates from the previously agreed). If the output we see a softer version of «robbery», EUR/USD retrace the area of ​​1.30, with a sigh of relief. However, the longer the uncertainty will last, the more chance of a medium-term downtrend to 1.27. And that scenario seems most likely: hardly be voting policies at first. Also, pay attention to the release of ZEW, since the data worse than expected only to increase the pressure on the couple. The next support levels are located at 1.2860 and 1.2780.

GBP is more advantageous in comparison with their European counterparts, which is why the EUR/GBP could not even close the gap during the day. Despite the gloomy outlook British economy, while the stability of the banking system is not in question, so that the currency may continue to recover. However, do not go to extremes, and it is better to follow closely the economic releases. Publication of today’s report on the CPI can help in the evaluation of further monetary policy MPC. Figure below expectations may cause a slight weakening of GBP/USD targeting 1.5050. But much more important is the publication of the minutes of the last meeting scheduled for Wednesday.

Movement of USD/JPY at the opening of the week was logical, given the dynamics of the last pair, but not quite adequate, given the prospects of further monetary easing in Japan, for tomorrow Shirakawa losing his post, where he reigned for five years. Such behavior of the pair says that more players do not want to respond solely on rumors. They need concrete evidence that Kuroda will implement the wishes Abe. Therefore, we are quite skeptical about the likelihood of breakdown 96.50 mark in the coming week. Rather, the new rule does not attempt to roll back to the area of ​​94.00.

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Market Review for March 18 | Web Trade For All - Forex trading, analytical reviews of the market and help for beginners